Superannuation update - are you ready for 1 July?

The question mark over what is happening with
superannuation rates has been answered by the Budget Papers.

The government's policy (announced before the last
election) was to pause superannuation at 9.25%. The Budget has
confirmed that super contributions will increase from 9.25% to 9.5%
on 1 July 2014 (in accordance with the current legislation).
However, in the Budget Papers, the government proposes to freeze
the rate at 9.5% for four years, until 30 June 2018 - after which,
the rate is set to increase by 0.5% each year until it reaches
12%.

Employers must also take steps to ensure they are
compliant with SuperStream, a government reform aimed at improving
the efficiency of the superannuation system. SuperStream requires
employers to pay superannuation contributions using the
government's new data and payment standards (which effectively
means that employers must make super contributions on behalf of
their employees by submitting data and payments
electronically).

SuperStream, which is mandatory for all employers
making superannuation contributions, commences for large employers
(with 20 or more employees) on 1 July 2014. Large employers have
until 30 June 2015 to meet the SuperStream requirements.
Commencement is delayed for small employers (with 19 or fewer
employees).

For employers

• Ensure you pay employees the super guarantee rate
of 9.5% from 1 July 2014.

• Ensure you are preparing for the introduction of
SuperStream. Options may include upgrading your payroll software,
using an outsourced payroll service provider, using a commercial
clearing house or speaking to your default fund provider, who may
be able to give details about how to comply with SuperStream using
their preferred facilities.

• Collect information to support contributions
being made electronically, such as bank account details and
electronic service addresses.

We recommend that employers who are unsure of their
superannuation contribution obligations and/or the requirements
under SuperStream seek advice. If you have not met your super
obligations as an employer, you are liable to pay a superannuation
guarantee charge (SGC) to the Australian Taxation Office (and,
depending on the circumstances, possibly other penalties as well).
Company directors are also personally liable for SGC liabilities
that are not paid by the due date. Penalties may also be imposed
for a failure to comply with SuperStream.

The question mark over what is happening with superannuation
rates has been answered by the Budget Papers.

The government's policy (announced before the last election) was
to pause superannuation at 9.25%. The Budget has confirmed that
super contributions will increase from 9.25% to 9.5% on 1 July 2014
(in accordance with the current legislation). However, in the
Budget Papers, the government proposes to freeze the rate at 9.5%
for four years, until 30 June 2018 - after which, the rate is set
to increase by 0.5% each year until it reaches 12%.

Employers must also take steps to ensure they are compliant with
SuperStream, a government reform aimed at improving the efficiency
of the superannuation system. SuperStream requires employers to pay
superannuation contributions using the government's new data and
payment standards (which effectively means that employers must make
super contributions on behalf of their employees by submitting data
and payments electronically).

SuperStream, which is mandatory for all employers making
superannuation contributions, commences for large employers (with
20 or more employees) on 1 July 2014. Large employers have until 30
June 2015 to meet the SuperStream requirements. Commencement is
delayed for small employers (with 19 or fewer employees).

For employers

Ensure you pay employees the super guarantee rate of 9.5% from
1 July 2014.

Ensure you are preparing for the introduction of SuperStream.
Options may include upgrading your payroll software, using an
outsourced payroll service provider, using a commercial clearing
house or speaking to your default fund provider, who may be able to
give details about how to comply with SuperStream using their
preferred facilities.

Collect information to support contributions being made
electronically, such as bank account details and electronic service
addresses.

We recommend that employers who are unsure of their
superannuation contribution obligations and/or the requirements
under SuperStream seek advice. If you have not met your super
obligations as an employer, you are liable to pay a superannuation
guarantee charge (SGC) to the Australian Taxation Office (and,
depending on the circumstances, possibly other penalties as well).
Company directors are also personally liable for SGC liabilities
that are not paid by the due date. Penalties may also be imposed
for a failure to comply with SuperStream.